QCDs: A Heartfelt Way to Give While Managing Taxes
If you're charitably inclined and age 70½ or older, QCD’s may be a beneficial tax planning opportunity for you.
What's Changing in 2026?
Starting this year, new tax rules make it harder to deduct charitable contributions. Now, only donations exceeding 0.5% of your adjusted gross income (AGI) count toward itemized deductions. For example:
- If your AGI is $100,000 in 2026, only charitable contributions above $500 are deductible.
- If your AGI is $200,000, only contributions above $1,000 are deductible, and so on.
Additionally, for those in the highest tax brackets, deductions are now capped at 35% instead of your full tax rate.
The Good News: Qualified Charitable Distributions (QCDs) Are Unaffected
If you're 70½ or older with an IRA, QCDs allow you to donate directly from your retirement account to charity—and they are not subject to these new limitations.
Why QCDs Make Sense
- Tax-free giving: The distribution goes directly to charity and is excluded from your taxable income entirely
- Satisfies your RMD: QCDs count toward your required minimum distribution
- No AGI floor: Unlike regular charitable deductions, every dollar counts—no 0.5% threshold applies
- Simple and effective: You avoid taxes on the distribution while supporting causes you care about
- 2026 limit: You can donate up to $111,000 per year via QCD
Bottom Line
For clients age 70½ or older who give to charity, QCDs are now more advantageous than ever. They offer essentially a "perfect deduction"-directing money that would otherwise be taxed to charity at zero net cost to you.
Your Simple Next Steps If giving generously while staying tax-smart resonates with you:
- Explore our resources to learn more about QCDs in everyday language
- Schedule a conversation—we’ll listen to your story and see how this fits